The funding deal comes as Musk seeks to secure the financial firepower to catch-up with market leaders OpenAI, Anthropic and Google, all of which have released more powerful generative AI models than xAI. His pitch to investors is that xAI can gain ground thanks to its connection to the other companies he leads, which could provide technology, data and early revenue as customers of the start-up.
So it's considered a positive that Musk's other companies can make deals with xAI, as it would theoretically give it more value. Which seems kind of reductive, but apparently, there's significant optimism that Musk and Co. will be able to build AI systems that are able to compete with the emerging big players in the space.
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